The traditional approach to fraud management is starting to show cracks, and that's putting pressure on the teams who are trying to work with it to get the job done.
Rule engines and manual reviews of transactions used to work well. When there were fewer transactions, customers didn't expect instant confirmation and fulfillment and fraudsters were slower to change their tactics, this mechanism worked.
Today, we're living in a different world. Online businesses have to scale up, particularly during the holidays. Merchants must deal with a reality in which fulfillment should be instant for digital goods and close to instant for everything else. If manual reviews mean your goods aren't delivered within 2 days, you're no longer competitive.
Rules engines, with their complex chains of rules, can't be updated and analyzed quickly enough to keep up with today's fast-paced fraudsters. Today's criminals evolve their tactics and develop new techniques over days, not months. They use automation to increase the scope and scale of their attacks, and apps to change identities at lightening speed. You can read more about this in the MRC-Forter Online Fraud Attack Index.
Fraud teams are aware of all the pressures bearing down on their department. They're sensitive to the difficulties of balancing between risk and a high approval rate. On the one hand, the company expects them to block fraud. On the other hand, they're expected to move orders through quickly and avoid false positives.
This is hugely challenging using traditional fraud prevention mechanisms. A study from Javelin, The Financial Impact of Fraud, found that:
Fraud management teams feel overwhelmed, understaffed and under-appreciated because they're focused on the wrong thing. Manual reviews should no longer be the primary focus of an online fraud protection team. That leads to a "crisis management" approach where the team is constantly playing catch-up and missing out on the bigger picture.
Leave the individual transactions to an automated system that can decision them in real-time, so that the customers are never slowed down. The decisions will be covered by a full fraud chargeback guarantee, so you don't need to be held back by the fear of fraud. Automated systems scale seamlessly, so the staffing troubles of the holiday season will become a thing of the past.
Once your team is no longer driven by the pressures of manual reviews, you can start to take an analytical, innovative approach to managing the fraud faced by your company.
Those research projects you've been wanting to do for months? The fraudsters you've been waiting for the right opportunity to track down? Start making your 'wishlist tasks' your new priorities.
No one knows the fraud facing your business better than you and your team. Leverage that knowledge, and give yourselves the time and the breathing room to explore, investigate, and analyze. In this way you'll be able to improve both the system, making it more accurate, and your company's understanding of its legitimate and fraudulent customers.
As you and your team are well aware, online fraudsters move fast - they're continually attacking different industries with new techniques, and changing up their approach to trick merchants into approving their fraudulent orders. In this report, Forter and MRC researched the data from 2016 to see how things had changed compared to 2015.
Download this report to learn: